CORPORATE GOVERNANCE PRINCIPLES COMPLIANCE REPORT
PART I-STATEMENT OF COMPLIANCE WITH CORPORATE GOVERNANCE
Our bank is determined to be coherent with Corporate Governance Principles (II-17.1) completely which was published in the official gazette (no: 28871) on 03.01.2014.
All mandatory principles, excluding exceptions for banks, mentioned on article 6, 3rd paragraph, are applied in our bank.
Almost all non-mandatory principles are applied without any conflict of interest. Compliance with non mandatory principles is still in progress.
2.1 Shareholder Relations Department
The Bank has an “Investor Relations and Corporate Governance Department” to establish relations with domestic and foreign investors and inform them about the Bank’s activities and financial results.
Çiğdem Çelikbilek and Özgün Zaimoğlu are responsible for the overall management of the department.
Their contact information is as follows:
Çiğdem Çelikbilek (Senior Manager)
Phone: +90 216 635 24 63
Fax: +90 216 636 36 36
Özgün Zaimoğlu (Manager)
Phone: +90 216 635 24 60
Fax: +90 216 636 36 36
Çiğdem Çelikbilek, as the manager of the department, holds Capital Markets Advanced Level and Corporate Governance Licences, is also a member of the Corporate Governance Committee of our Bank. The department works for Financial Group Control Assistant General Manager. A report regarding 2014 activities was prepared and presented to the Board of Directors on December 29, 2014.
In addition to meetings, nearly 50 queries about TEB have been answered by telephone and e-mail in 2014. The questions were about various subjects and all requests for information by shareholders were answered as quickly as possible, provided that they are not related to trade secrets or information that is not publicly available.
In addition, a Shareholder Relations Department referred to as the “Shareholders Unit” in the organizational chart has been established in an effort to organize general assembly in line with existing legislation, articles of association and other internal principles, to prepare and provide necessary documents for shareholders, to ensure all information about shareholders is updated and kept safely, to evaluate shareholders’ requirements related to their rights and to answer written questions about related subject.
The contact details of this unit are as follows:
Jale Akman Aydoğdu
Phone: +90 216 635 34 69
Fax: +90 216 636 36 36
E –mail : email@example.com
Phone: +90 216 635 34 70
Fax: +90 216 636 36 36
E –mail : firstname.lastname@example.org
This unit reports to the General Secretary of the Board of Directors.
2.2 Exercise of Shareholders’ Right to Information
Except the special enquiries from the shareholders, all information that should be provided within the scope of shareholders’ rights is available on Corporate Governance and Investor Relations sections on TEB’s web site both in Turkish and English and the information is updated regularly.
Although Article 32 of Articles of Association, TEB provides for the appointment of a special auditor, there was no request regarding appointment of special auditor.
2.3 Information on General Meetings of Shareholders
The General Meeting of Shareholders convened to an Ordinary General Meeting on 25 March 2014 and attendance was 97.82.%. In accordance with Turkish Commercial Code article 1527, regulations established regarding electronic Joint Stock Company General Assembly’s, participation through Electronic General Assembly System ( EGAS) was provided through MKK. No media members were present at this event.
Invitation letters except for shares continuously traded on stock exchange were sent by registered mail at least 3 weeks prior to the respective meeting dates to the Shareholders in the share register. The meetings were also announced in the Turkish Trade Registry Gazette and a national daily newspaper. In addition, e-mail messages were sent to the shareholders whose e-mail addresses were known. BRSA, MKK, Ministry of Science, Industry and Technology, and KAP were informed about place, date, and agenda of the general assembly meeting.
Shareholders exercised their right to ask questions at general meetings and their questions were answered informatively. Questions which could not be answered during the General Assembly were answered in written form by Investor Relations and Corporate Governance department.
To facilitate attendance at General Meetings of Shareholders, notices are sent out on time, and best communication method is chosen to reach maximum possible number of attendees, the meetings are held in central locations in Istanbul.
The minutes of the meetings are made available at KAP and on the website for shareholders information
In accordance with the provisions of the 6362 Capital Markets Act article, section 30/2, and 6102 Turkish Trade Commercial article, clause 417, shareholders who are on Central Registry Agency (MKK) list attended to the general assembly meeting.
The shareholders who attended the Ordinary General Assembly meeting individually or via proxy did so by submitting the below listed documents up until the commencement of the general assembly, Identity documents and/or proxies. In case of legal entity shareholders; the authorization document of the person who is authorized by the legal entity shareholder.
As an obligation, it has been stated in the invitations that the proxies had to be prepared in line with the template provided in meeting announcement, be notarized or have in its enclosure a notarized copy of the signature circular.
It has also been stated that shareholders, who were intending to participate to the General Assembly meeting on electronic media in person or through their representatives, shad to register to e-MKK portal, obtain electronic signature, and in case they needed it shareholders could find supportive information on EGKS through MKK portal.
The date, venue, time and agenda of the meeting, as well as sample statements for those who wish to appoint a proxy to attend the meeting on their behalf, were included in the invitation letters, the newspaper announcements and on TEB’s website.
In addition, all shareholders were informed about total amount of donations and their beneficiaries and in accordance with Capital Market Law number 6362, article number, 19/5, maximum amount of donations allowed in 2014 is provided to the General Assembly for their approval.
2.4 Voting Rights and Minority Rights
There are no privileges regarding voting rights. Further there are not any cross-shareholding companies. Minority shares are not represented in management; however the views, suggestions and requests of minority shareholders are communicated to the management through the Investor Relations and Corporate Governance Department and the Shareholders Unit.
2.5 Dividend Policy
There are no privileges regarding dividend distribution. TEB’s dividend policy, which was amended on 29 September 2006 and announced to the public, is as follows:
“Türk Ekonomi Bankası A.Ş. will pay up to 40% of the net distributable profit to its shareholders as a cash dividend or as bonus shares within the context of its Articles of Association. The amount distributable depends on market conditions, maintenance of a comfortable capital adequacy ratio and growth plans of the bank and will be proposed by the Board of Directors to the Ordinary General Meeting of Shareholders every year.”
No dividend was distributed for the profit generated in the year 2013.
2.6 Transfer of Shares
Article 10 of the Articles of Association stipulates that:
Transfer of the shares and exercise of the rights pertaining to the shares will be governed by the pertinent provisions of the Turkish Commercial Code, the Banking Code, the Capital Markets Act and other applicable laws and regulations,
Transfer of shares corresponding to the percentages specified in Banking Code and transfer of shares holding rights of usufruct shall be subject to prior permission of the Banking Regulation and Supervision Agency.
PART III-PUBLIC DISCLOSURE AND TRANSPARENCY
3.1 The Website and its Contents
All the information for our investors and customers is provided under Investor Relations and Corporate Governance sections both in English and Turkish,
Information is available under the following headings:
3.2 Annual Reports
Annual Report includes Corporate Governance Compliance Report; therefore Corporate Governance Principles are practiced in the report.
4.1 Announcements to Stakeholders
Stakeholders are provided information concerning TEB’s activities through special circumstances disclosures, as published on the website and in annual reports. Views, opinions and questions submitted to TEB using the ‘Contact us’ section of the website are referred to the relevant departments and answered within the framework of applicable legislation.
4.2 Participation of Stakeholders in Management
As banking practice and legal rules impose strict restrictions on the appointment of executives, no model has been devised for stakeholders to personally take part in management. TEB believes that this applies equally to other banks in the industry. However, stakeholders can communicate their views, opinions, critiques and demands to the management through the “Investor Relations and Corporate Governance Department”, the “Shareholders Unit” and the “Customer Communications Unit”.
4.3 Human Resources Policy
The main objective of TEB’s Human Resources Group is to adopt the best HR practices in the finance industry.
Given this objective, the Bank’s human resource policy assures the following:
TEB HR department contributes to the productivity and performance of Bank’s employees and branches; by providing quick and effective HR support and practices.
By the end of 2014, TEB has 10,142 personnel and 551 branches. % 63.0 of the TEB employees have university degree while 5.6% holds a graduate degree and 0.1 % holds a post graduate degree. Average training time per employee increased 4% per person and was realized as 74 hours.
In line with its targets and strategies, it is TEB’s policy
4.4 Ethical Rules and Corporate Responsibility
As also stated on our website, The Board of Directors complies with the Code of Banking Ethics dated
November 1, 2001 and numbered 1012 as prepared and published by the Banks Association of Turkey to which TEB contributes to the activities thereof.
In addition, TEB Group Ethical Principles are defined and delivered to all employees. Ethical principles are classified as “Use of Company Resources”, “Relations”, Responsibilities Toward the Company”, “General and
Particular Rules” serving as a resource to adopt corporate culture and guide that all employees can consult.
Ethical Rules section is on Corporate Governance section on our web site.
Seeing corporate social responsibility as a style of conducting business, TEB acts in line with its mission to become a bank that considers its stakeholders’ priorities and basic values as its corporate priorities, while at the same time protecting the heritage of the community it serves.
While investing in future generations, TEB also supports those practices that contribute to the creation of a sustainable economy, environment and community.
While keeping a close watch on those of its business processes and operations which have an effect on the community, the environment and the economy, TEB also encourages its employees to contribute on a voluntary basis, to ensure they become a part of the solution in social issues.
Contributing to the Environment
As a pioneer aware of its responsibility to contribute to a sustainable environment, TEB developed and deployed an effective and systematic management approach to minimize the environmental impacts of its activities.
ISO 9001:2008 Quality Management System, ISO 14001 Environment Management System, and ISO 10002 Customer Satisfaction Management System are implemented to have better and more efficient operational progress. All the management systems are integrated. Bureau Veritas inspects the systems every year and provides us information for our continuous development process. In addition our bank is the first savings bank that has Environmental Management System.
Our bank also does reporting within the context of/as part of CDP (Carbon Disclosure Project )
Contributing to the Community
TEB Family Academy
TEB is aware that the most important ingredient in its expanding sphere of influence is its effort to enable people in developing countries access financial services and to raise their financial awareness. It is critical to ensure the proper management of the economies of families, which are the most fundamental unit of the community and which play a key role in raising Turkey’s standard of living. For this reason, TEB has adopted the mission of spreading financial literacy nationwide through its branches.
Within the framework of this platform, with its long term aim of raising social awareness of banking transactions and to instill an awareness of saving, seminars are held at TEB branches with the purpose of guiding families on budget management, and of the financial instruments they can use for their savings.
TEB Family Academy, launched in 2012, has provided financial literacy training to 285.000 people at the end of 2014.
Free trainings regarding balancing family and individual income and spending, the appropriate use of banking products and customer rights in the banking sector have attracted a great deal of attention from participants . As a result of the strong interest that this scheme attracted, we moved these training sessions outside branches and began to train people in universities, public institutions, private sector companies, associations and chambers. . In Ankara, we opened the TEB Family Academy House with a 100-person capacity. We are determined to diversify our efforts within the TEB Family Academy and to reach broader masses.
As part of our efforts, we have reached children through in-class training and the TEB Children website (including the associated application, at www.tebcocuk.com) prepared to furnish children with an awareness of saving in a way that is enjoyable for them. As a part of TEB Children Platform, TEB Children/Kids Theatre was established during 2014 and musical play was put on stage to provide savings awareness to kids. While TEB Children theatre reached 15.000 kids, it was able to reach 824.000 kids through digital platform.
The TEB Family Academy joined forces with the Boğaziçi University and conducted the first Financial Access Index study in Turkey. Results of Second Index study was released in 2014. The study analyzed Turkey based on 3 main criterias known as financial literacy indicators; financial information, financial attitude, and financial behavior, as a result of aTurkey’s financial literacy index was calculated as 59.4%. The study indicated if banking industry can reach more women, rural areas, and young people, the sector will have a big boost. TEB aims to reach these segments and to improve their financial literacy. TEB sees this not only as a business opportunity, but also as a responsibility.
The Financial Literacy and Inclusion Summit also provided the occasion for the announcement of the “Social and Financial Education through the Arts” project for primary school children. Conducted jointly by the Turkish Ministry of National Education (MEB), TEB, and UNICEF, the project aims to create a financially literate generation by reaching out to 11 million schoolchildren in the 6-14 age group through their art lessons. While the first stage of the project will be focusing on the visual arts curriculum, ways to include financial literacy in other branches of the arts are also being explored.
SME Banking, SME Academy, SME TV
TEB considers SME’s as its primary stakeholders, as they are one of the building blocks of economic development. TEB SME Banking undertakes efforts to ensure that SME’s can enhance themselves in non-financial areas and to help them establish a more sustainable presence in the future. All of these efforts for SME’s have been undertaken through the SME Academy. The platform, which operates on the basis of the Bank’s Stakeholder Participation strategy, is a core principle of TEB’s corporate responsibility policy, and offers all current information that may be required by SMEs.
TEB Supplier Conference
TEB’s corporate responsibility strategy is rooted in stakeholder dialogue and in fulfilling stakeholder expectations. Because suppliers play an important role in its ability to fulfill such responsibilities, TEB gives high priority to making them aware of their own corporate social responsibilities, such as for example the proper and effective use of resources. In line with this approach, TEB gave a presentation on the subject of responsible supply chain management at a special conference that it organized for its suppliers in 2014. During this presentation, financial developments, human resources practices, and innovation topics were discussed/ evaluated.
Striving to contribute to the community where it has a presence, TEB was one of the organizers of the WTA Championships held in Turkey.
Tournaments organized in 2011,2012, and 2013 raised people’s interest in tennis and be a significant source of motivation for professional tennis players. As one of the organizers of this prestigious sports event which won the approval of tennis authorities and tennis fans alike, TEB was handed the Billie Jean King Award by the WTA. TEB’s sustainable investments to tennis projects continued with TEB BNP Paribas İstanbul Cup sponsorship organized at July 14-20. Our customers, social media followers were entertained during TEB BNP Paribas İstanbul Cup tournament. Street Tennis Project targeted handicapped kids to love tennis.
Aiming to raise its employees’ awareness of their social responsibility, TEB continues to increase the number of volunteering projects every year. In this context, 70 TEB employees ran in the International Eurasia Marathon, collecting donations for the Spinal Cord Paralytics Association of Turkey. Also reading books for the Technology and Education Laboratory for the Visually Disabled (GETEM), a division under the Bosporus University, TEB Volunteers have recently collected toys for the toy libraries opened in Anatolia by the Foundation for the Support of Women’s Work (FSWW).
SECTION V-BOARD OF DIRECTORS
5.1 Structure and Composition of the Board of Directors
Below are Board of Director’s names and responsibilities as of December 31, 2014:
Dr. Akın Akbaygil*
Executive Member and General Manager
Alain Georges Auguste Fonteneau
Jean-Milan Charles Dominique Givadinovitch*
Yvan L.A.M. DeCock
Jacques Roger Jean Marie Rinino
Henri Simon Andre Foch
* In accordance with the CM Communiqué II-17.1, Audit Committee Members in banks qualify as independent board members.
An up-to-date list of the members of the Board of Directors and their resumes are available on TEB’s website.
The qualifications required for membership in the Board of Directors are specified in Article 21 of the Articles of Association and the relevant provisions of the Banking Law. The qualifications of TEB board members comply with applicable legislation and the Corporate Governance Principles.
Article 30 of TEB’s Articles of Association on Prohibited Transactions states the following:
“The Chairman and members of the Board of Directors as well as the Chairman and members of the Credit and Audit Committees, the General Manager, the Deputy General Manager and the Assistant General Managers comply with the provisions of the Turkish Commercial Code, the Banking Code, the Capital Markets Act and other related laws and regulations on the acts and transactions that may not engage in.”
5.2 Board of Director’s Main Business Objectives
The Board of Directors shall meet as often as needed in the course of business. The Chairman or Vice Chairman of the Board of Directors may, in their sole discretions and initiatives, call the Board of Directors for a meeting. Each of the Board Members may request from the Chairman in writing to call the Board of Directors for a meeting. Board meetings may be held at the Company’s headquarters or in country or abroad.
The Board of Directors has taken 176 decisions in 2014. Meeting quorum is met with the presence of at least 11 (eleven) members and resolutions are passed with the affirmative vote of at least 11 (eleven) members. In the Board meetings, a Board
member cannot vote as a representative of another Board Member, and they cannot be represented by proxy. Any and all types of Board of Directors’ resolutions should be written and signed to have validity.
General Secretary is responsible to organize the Board of Directors meeting s and to keep documents in order. Members of the Board of Directors submit to the General Secretary any items that they want to be included in the agenda and the final agenda is communicated to the members at least one week before the meeting.
Meetings of the Bank’s Board of Directors are organized through the General Secretary of the Board of Directors. Members of the Board of Directors submit to the General Secretary any items that they want to be included in the agenda and the final agenda is communicated to the members at least one week before the meeting.
Members who do not attend a meeting based on a reasonable ground are informed of the resolutions taken in their absence at the first meeting they attend. There are meeting minutes whereby the decisions taken are noted. TEB’s Articles of Association does not contain any provisions on weighted voting rights or negative veto rights.
5.3 Committees, Structure and Independence of Board of Director’s
In accordance with corporate governance principles, the following committees were active in 2014:
Corporate Governance Committee
Follow-up on the Corporate Governance practices in the Bank .Meets upon invitation from the Chairman.
Chairman: Dr. Akın Akbaygil, Deputy Chairman of the Board
Deputy Chairman: Yavuz Canevi, Chairman of the Board
Jean Paul Sabet, Deputy Chairman of the Board
Jean Milan Charles Dominique Givadinovitch, Board Member
Çiğdem Çelikbilek, Investor Relations and Corporate Governance Senior Manager
Attendees: Ayşe Aşardağ, Board Member
Sabri Davaz, Board Member
Hakan Tıraşın, Head of Internal Audit
Birol Deper, Head of Compliance and
Internal Control Group
Melis Coşan Baban, Head of Legal Affairs Group
Feryal İmşir, CMB Regulations Coordinator,
Aşkın Dolaştır, Financial Affairs AGM
Committee Secretary: Çiğdem Çelikbilek, Investor Relations and Corporate Governance Senior Manager
Meets: As required
Meets every three months.
Chairman: Jean Milan Charles Dominique, Board Member
Deputy Chairman : Dr. Akın Akbaygil, Deputy Chairman
Members: Yvan L.A.M De Cock, Board Member
Sabri Davaz, Board Member
and other possible attendees requested with respect to the agenda.
5.4 Risk Management and Internal Control
In accordance with the provisions of the Banking Law No: 5411, the Bank has established an “Audit Committee” reporting to the Board of Directors through two non-executive board members exclusively appointed for this task.
The Board of Directors has set up the Audit Committee for the following purposes
5.5 Strategic Plans and Targets
At our Bank, all targets, primarily budget targets are assessed and approved by Board of Directors. Meetings with senior managers, branch managers, and other related managers are organized to evaluate Bank’s achievements (in line with targets) and to discuss the initiatives for staying behind the planned target.
5.6 Remuneration of the Board of Directors
At the Ordinary General Meeting of Shareholders held on 25 March 2014,
it was resolved that TRY 6,000 fee should be paid to Alain Kokocinski due to his position as a Board of Directors Member.
In 2014, TRY 26,081,753 was paid to the Members of the Board of Directors and top management as salaries, rights and financial benefits.
Board members may be granted loans within the limits defined by law or may be rewarded bonuses depending on the performance of the Bank, the duties vested on them and the time spent by them to fulfill these duties.